New York: Oil prices hit a record high of $109 for the first time Tuesday as investors sought refuge from the weakened dollar.
Light sweet crude for April delivery surged to $109.72 a barrel before falling back somewhat to trade at $109.34 a barrel by early afternoon in European trading on the New York Mercantile Exchange.
On Monday, crude futures rose $2.75 to settle at a record $107.90 a barrel.
Oil rallied even as the International Energy Agency cut its forecast for 2008 global oil demand for a second month because high prices and weaker economic growth in industrialised nations.
The agency, an adviser to 27 industrialised nations, reduced its forecast for 2008 demand by 80,000 barrels a day to 87.54 million barrels a day, leaving annual demand growth at 2 percent, the IEA said on Tuesday in a monthly report.
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